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Tuesday, January 10, 2012|
401k Fee Disclosure Delayed? Maybe Not
Will they or won't they? News reports have created mixed signals about whether the Department of Labor will put off the implementation date for new fee disclosure rules. Indeed, the DoL claims it has sent no signals at all.
"The department is sympathetic to concerns by industry, but we haven't signaled that applicability deadlines will be extended," a DOL spokesman told BenefitsPro. "We're sympathetic to concerns, so we are aware of them. I'm not going to speculate where the current information is coming from."
Meanwhile, press reports have been hinting that the planned April 1 implementation may be delayed. Last week Reuters reported that trade groups are asking for the hold off.
Monday, Bloomberg and the San Francisco Chronicle picked up on the possible delay.
The rule require 401(k) plan providers to report new information about fees and conflicts of interest to employers.
The department published an interim final rule that required service providers to comply by April 1. There will also be a second different set of fee disclosures by employers to employees that is set to take effect on May 31.
401(k) plan providers are saying they could not comply with the required April 1 deadline.
The Spark Institute, which represents 401 (k) service providers, wrote a letter to Labor deputy assistant secretary Michael Davis on Friday stating that "since the final regulations have not yet been released, the vast majority of recordkeepers have indicated that they will not be able to comply with regulations by April, 1, 2012."
The letter further said that "assuming that the final regulations will include some changes or new requirements...the majority of recordkeepers estimate they may require 12 months."
The DoL's statement to the Chronicle echoed what it said to BenefitsPro. DoL spokesperson Jason Surbey emailed that they "have a high degree of confidence that the final rule mandating service provider-to-employer/plan sponsor fee disclosure will be published by end of this month. The department is sympathetic to the concerns expressed by the industry regarding the applicability dates, but has not signaled that the applicability dates will be extended."
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